Panel Oks Extension Of Pension Payments

2 More Months For City`s Retirees

March 30, 1988|By James Strong.

A Chicago City Council committee Tuesday recommended approval of a proposal to guarantee health insurance coverage for some 16,000 retired city workers for the next two months while negotiations continue on reform of the city`s four public pension funds.

The Budget Committee, headed by Ald. Lawrence Bloom (5th), agreed to divert $3 million from benefit funds for current city employees to cover the health insurance costs, despite warnings that continued temporary bailouts could create a city budget shortfall of $22 million later this year.

The growing concern over retirees` health insurance and the future of city pension funds stems from a dispute between the city and representatives of the municipal pension funds over liability for retirees` health care costs.

City Corporation Counsel Judson Miner advised both the Washington and Sawyer administrations that the city`s payments of more than $83 million for health care coverage dating to 1980 have been illegal because the council never authorized such contributions.

The city and officials of the police, fire, laborers and municipal employees pension funds have been locked in negotiations over city demands that the pension funds, with assets in excess of $3 billion, or their beneficiaries accept responsibility for the health care contributions.

The alternative, according to Miner and City Comptroller Ronald Picur, would be increased property taxes to cover the $22 million cost.

Ald. Michael Sheahan (19th) has urged the 90-day extension to ease the recurring anxiety of retirees that their health insurance will be cut off.

He has recommended that the $22 million be taken from Miner`s budget, which he insisted was ``bloated`` with an excessive number of lawyers and other personnel.

The city discovered last year that payments for health care coverage were unauthorized by the City Council dating back to the Byrne administration in 1980. Initial payments of $2 million to help the pension funds on health care have escalated to a total of $83 million in contributions made over the last 17 years.

Last October, the city sued the four pension fund boards to force them to assume full responsibilities for health insurance.

Picur said police and fire retirees have paid no health insurance premiums since 1982, and other pensioners` contributions have remained at $26 per month since then.

Meanwhile, negotiations between the city and the pension funds are continuing in an effort to forge an agreement to present to the Illinois General Assembly, which must approve any changes in benefits offered by pension funds, including changes in contributions to benefit funds.